Exhibit 15.3 -Exhibit 15.3 Shows Equilibrium in a Money Market. What Happens

Multiple Choice

Exhibit 15.3

-Exhibit 15.3 shows equilibrium in a money market. What happens if the money supply curve shifts from S'_m to Sm while the rate of interest remains at I'?

A) There will be an excess demand for money.
B) There will be an excess supply of money.
C) The Fed will buy U.S. Treasury securities.
D) The quantity of money demanded will fall.
E) The quantity of money supplied will fall.